Key Republicans led by House Speaker John A Boehner held discussions at the White House, where they presented a plan to extend the borrowing powers to another six weeks in return for the government's assurance on opening talks on long-term spending cuts and a tax overhaul.

US President Barack Obama did not immediately accept a Republican proposal for a short-term extension of the Treasury's borrowing powers, which would avert a debt default, as the Republicans would not tie it with a plan to re-finance the government stalled for more than ten days.

Following the meeting, Republican and Vice Chair of the House Republican Conference Lynn Jenkins, said, "Opening the government is a negotiation that will happen [on 10 October] and in the hours ahead, we hope to have it open by [15 October]."

"Asian markets are acting like we have already seen agreement on extending the debt ceiling through to 22 November. However, it almost seems as if they are also assuming an end to the shutdown could also be worked into an agreement," said Chris Weston, market strategist at IG.

Wall Street Jumps 2%

On Wall Street, indices ended over 2% higher on 10 October amid anticipation that the Republicans and the Democrats were moving close towards a deal.

The Dow finished 323.09 points higher or 2.18% at 15,126.07.

The S&P 500 closed 36.16 points higher or 2.18% at 1,692.56.

The Nasdaq ended 82.97 points higher or 2.26% at 3,760.75.

The CBOE Volatility Index (VIX), broadly viewed as the best gauge of fear in the market, tumbled to about 16, after striking a seven-week high of 21 earlier in the week.

Company Stock Movements

In Tokyo, index heavyweight Fast Retailing fell 4.6% after the firm issued a downbeat forecast for the current financial year. However, the stock has gained some 46% in the year so far.